Selecting a Corporate Trustee: Using the 2025 America’s Most Advisor-Friendly Trust Companies Guide

Choosing the right trustee to manage a trust is a pivotal decision to protect your assets and ensure your wishes are honored. For those considering a corporate trustee, The Wealth Advisor offers its 2025 America’s Most Advisor-Friendly Trust Companies guide, accessible at The Wealth Advisor’s website. This resource highlights top trust companies known for advisor-friendly services, offering a starting point for selecting a professional trustee. 

Corporate trustees aren’t ideal for everyone, however, with drawbacks like high costs, bureaucracy, and a potentially impersonal approach, especially for vulnerable or impaired beneficiaries. In traditional aging-in-place planning, utilizing a family trustee and incorporating a Private Care Agreement can enhance your strategy by managing care costs, incentivizing trusted family members to provide or oversee care, and facilitating asset transfers that, if structured properly, avoid Medicaid eligibility issues. This article explores how to use the guide, the pros and cons of corporate trustees, and how a Private Care Agreement can complement your plan, whether or not you use a corporate trustee.

Understanding the 2025 America’s Most Advisor-Friendly Trust Companies GuideThe 2025 America’s Most Advisor-Friendly Trust Companies guide, published by The Wealth Advisor, profiles leading trust companies that excel in collaborating with financial advisors to manage trusts effectively. It details each company’s history, leadership, services, and strengths, managing collectively over $438 billion in assets (per prior editions). The guide emphasizes firms that provide tax savings, legal protection, and tailored planning, making it a valuable tool for identifying corporate trustees suited to aging-in-place or elder law needs. For those establishing trusts to fund home care, accessibility modifications, or legacy planning, this guide streamlines the selection process.Why Consider a Corporate Trustee?Corporate trustees offer distinct advantages for managing trusts:

1. Expertise and Continuity: Corporate trustees bring professional knowledge in trust administration, tax compliance, and investment management. Unlike individual trustees, who may become unavailable, corporate trustees ensure long-term continuity.
2. Impartiality: As neutral parties, corporate trustees minimize family conflicts over asset distribution or trust management.
3. Resources: Companies like those in the guide (e.g., The Private Trust Company or South Dakota Trust Company) have robust systems for handling complex trusts, including legal and financial expertise.

For aging-in-place planning, a corporate trustee can manage financial tasks like paying bills or funding care, allowing you to focus on living comfortably at home, and/or allowing family to provide and support care for you at home.Key Disadvantages of Corporate TrusteesDespite their benefits, corporate trustees can have significant drawbacks:

1. Cost: Fees, often a percentage of assets or flat annual charges, can be substantial and erode trust funds, especially for smaller trusts. Review fee structures in the guide’s profiles.
2. Bureaucracy: Institutional processes can lead to delays or inflexibility, such as slow approvals for care-related distributions.
3. Lack of Personal Touch: Corporate trustees may prioritize protocol over empathy, which is problematic for vulnerable or impaired beneficiaries who need advocacy but can’t self-advocate.  
4. Limited Personalization: Corporate trustees may struggle to address unique family dynamics or non-financial needs, such as coordinating with caregivers.

Enhancing Your Plan with a Private Care AgreementA Private Care Agreement (also called a Personal Care Agreement) is a legal contract between you and a trusted family member or individual to provide or manage care services in exchange for reasonable compensation. This tool can complement a trust managed by a corporate trustee and address aging-in-place needs while aligning with Medicaid planning. Here’s how it works and why it’s beneficial:

1. Managing Care Costs: A Private Care Agreement formalizes payments to a family member for caregiving tasks (e.g., personal care, meal preparation, or managing home modifications). By setting a fair market rate, you can keep care costs manageable compared to professional agencies, which are often more expensive.
2. Incentivizing Family Involvement: The agreement encourages trusted family members to commit to providing or overseeing care, ensuring consistency and a personal touch that corporate trustees may lack. For example, a family member can coordinate with caregivers or monitor your well-being, complementing the trustee’s financial management.
3. Medicaid-Compliant Asset Transfers: If structured properly, payments under a Private Care Agreement are considered compensation for services, not gifts, and thus do not count as improper asset transfers that could trigger Medicaid’s five-year look-back period. To ensure compliance, the agreement must:
   • Be in writing and signed before services are provided.
   • Specify services, frequency, and fair market compensation (consult local rates for caregivers).
   • Be approved by your elder law attorney to avoid Medicaid penalties.
4. Integration with a Trust: A corporate trustee can distribute funds from the trust to fulfill the Private Care Agreement, ensuring payments are made as agreed. This structure maintains professional oversight while prioritizing personalized care.

When selecting a corporate trustee from the guide, ask if they have experience managing trusts that fund Private Care Agreements. Ensure they can handle distributions for care-related expenses promptly and understand Medicaid-compliant structures.Special Considerations for Vulnerable BeneficiariesTrusts for aging-in-place or elder law often involve vulnerable beneficiaries, such as those with cognitive decline or disabilities. Corporate trustees provide stability but may lack the empathy or flexibility needed to advocate for these individuals. For example, they may not proactively adjust distributions for changing care needs (e.g., increased support due to health decline). A Private Care Agreement can bridge this gap or offer a non-institutional alternative by designating a family member or members to oversee care, ensuring the beneficiary’s needs are met with compassion.
To further protect vulnerable beneficiaries, appoint a trust protector. This independent third party (e.g., an attorney) oversees the corporate trustee’s actions, ensuring they align with the trust’s purpose and the beneficiary’s best interests. A trust protector can intervene if the trustee is unresponsive or fails to accommodate a Private Care Agreement’s requirements. When reviewing companies in the guide, confirm their willingness to work with trust protectors.How to Use the Guide to Select a Corporate TrusteeTo choose a corporate trustee using the 2025 America’s Most Advisor-Friendly Trust Companies guide, follow these steps:

1. Review Profiles: Examine each company’s services, leadership, and expertise. Prioritize firms with experience in elder law or trusts funding aging-in-place needs, such as home care or Private Care Agreements.
2. Assess Advisor-Friendliness: Choose companies that collaborate well with advisors, as highlighted in the guide, to ensure seamless coordination with your elder law attorney or planner.
3. Evaluate Costs and Services: Compare fee structures and ensure they align with your trust’s size and complexity. Check for flexibility in handling care-related distributions.
4. Consider Jurisdiction: Some firms operate in states like South Dakota with favorable trust laws (e.g., no state income tax), which can enhance tax planning.
5. Inquire About Private Care Agreements: Contact shortlisted companies to confirm they can manage trusts funding Private Care Agreements and handle Medicaid-compliant distributions.
6. Assess Support for Vulnerable Beneficiaries: Ask how the trustee addresses the needs of impaired beneficiaries, including communication with caregivers and flexibility for discretionary distributions.
7. Incorporate a Trust Protector: Draft your trust to include a trust protector to oversee the corporate trustee, especially if a Private Care Agreement is involved.
8. Consult Your Financial Advisor or Planner:  Your financial planner or wealth advisor might offer insights or alternatives;  an advisor's prior relationship with a trustee might be more reliable than selecting from even a curated list of capable advisors.    

When to Choose an Individual Trustee InsteadAn individual trustee, such as a family member, may offer a more personal approach, especially when paired with a Private Care Agreement and/or a proactive lifetime planning trust. An individual can provide or oversee care directly, ensuring empathy and responsiveness. Individual trustees may, however, lack the expertise or impartiality of corporate trustees. A hybrid approach, such as naming a corporate trustee with an individual co-trustee or caregiver under a Private Care Agreement, can balance professionalism with personalized care.Final ThoughtsThe 2025 America’s Most Advisor-Friendly Trust Companies guide is an excellent resource for identifying reputable corporate trustees to support your aging-in-place or elder law plan. By carefully reviewing the guide, you can select a trustee with the expertise to manage your trust effectively. However, corporate trustees come with challenges, including high costs, bureaucracy, and a potentially impersonal approach, which can be problematic for vulnerable beneficiaries.
Consult your elder law attorney to integrate a Private Care Agreement with your trust and ensure Medicaid compliance. By combining the guide’s insights with a tailored caregiving strategy, you can create a robust plan that supports aging in place with security and compassion.
Finally, consider the following: 

• Unpacking Trustees- Primary, Successor, and Special Trustees, Trust Protectors and More 
•  Questions to Ask Before Serving as Trustee
•  New Guides Help Those Appointed to Manage Someone Else's Money
•  The Obligations of a Fiduciary 

Source: "America’s Most Advisor-Friendly Trust Companies 2025," The Wealth Advisor